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India Weighs Easing SEZ–Domestic Market Barriers to Boost Exports

Officials are weighing measures to integrate SEZs with the domestic market to bolster export competitiveness.

Overview

  • The Prime Minister’s Office is conferring with the commerce and revenue departments on options to reduce friction between SEZs and the domestic tariff area.
  • Proposals under study include rationalising customs duty on sales to the DTA, permitting rupee payments for domestic services, and allowing domestic units to send goods into SEZs for outsourcing.
  • Any overhaul would likely require amendments to the SEZ Act, 2006, along with corresponding changes to customs rules.
  • Officials described the review as preliminary and said the framework must be nimble enough to respond to business challenges in a volatile global environment.
  • SEZs accounted for Rs 14.57 lakh crore of goods exports in FY25 from roughly 6,300 units across 276 zones, as industry voices urge a shift toward integrated development hubs.